If an "AI" company can sell you access to software that will replace a $250k/year software engineer.
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If an "AI" company can sell you access to software that will replace a $250k/year software engineer. They're going to charge $249k/year for it.
That's how capitalism works.
Well, they're going to charge $20k/year at first, during the land rush phase. Wait for some competitors to die off. Keep it low a while longer to kill off the incumbents. Then it'll jump up a bunch, before finally being even more expensive than the original thing.
See also: Uber & AirBnB.
@preinheimer I tried pointing this out at a local digital meetup group towards the end of last year. I was the only woman in the room, and none of the men there believed this would be the end game when it comes to pricing.
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@preinheimer I tried pointing this out at a local digital meetup group towards the end of last year. I was the only woman in the room, and none of the men there believed this would be the end game when it comes to pricing.
@emkingma ugh. OpenAI will lose 14 billion dollars this year, theyβre going to want that money back 100 fold.
Where do people think that money is going to come from?
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If an "AI" company can sell you access to software that will replace a $250k/year software engineer. They're going to charge $249k/year for it.
That's how capitalism works.
Well, they're going to charge $20k/year at first, during the land rush phase. Wait for some competitors to die off. Keep it low a while longer to kill off the incumbents. Then it'll jump up a bunch, before finally being even more expensive than the original thing.
See also: Uber & AirBnB.
@preinheimer and once no one is a software engineer anymore, there might be a gold package that you might want to subscribe to, where your AI generated software will not display advertisments to your customers ... for only 750k/year.
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If an "AI" company can sell you access to software that will replace a $250k/year software engineer. They're going to charge $249k/year for it.
That's how capitalism works.
Well, they're going to charge $20k/year at first, during the land rush phase. Wait for some competitors to die off. Keep it low a while longer to kill off the incumbents. Then it'll jump up a bunch, before finally being even more expensive than the original thing.
See also: Uber & AirBnB.
@preinheimer @davetang Turning the free market into the fleece market.
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@preinheimer @jbigham there were a handful of taxi firms in london that seemed to use an app (I suspect white boxed from Hailo). Most of those now seem to have shifted to the "on-demand" marketplace model (no permanent crew, just putting jobs up on the app).
Taxis are completely awful now. If you book one 2 days in advance, they don't tender the job until 10 mins before your booked time, and more often than not, you don't get a driver on time.
Zero point in booking in advance.@tmcfarlane @preinheimer interestingly, when you book a ride in advance on uber, they do find a driver beforehand, at least for less busy routes. you can actually get someone in fairly kind rural'ish parts of the U.S. doing this
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@jbigham @preinheimer it's also interesting to ponder that while we may think Uber won because of the user experience, the apps could have happened (and did), without the switch in employment model.
Ultimately the millions in VC money went in to lower prices to kill the private hire industry. Not to create a nice app. Not because the Uber model was better, but to make the Uber model the only option.
VC money established a cartel monopoly. The "tech" element is entirely incidental.@tmcfarlane @preinheimer i think there were vastly different experience with pre-uber car services. in pittsburgh, it was an incredible mess, a different nasty private equity firm had bought up the local places, made it both super expensive and super unreliable to get a taxi, so nobody misses them here. but, sad for places that had a working model before
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If an "AI" company can sell you access to software that will replace a $250k/year software engineer. They're going to charge $249k/year for it.
That's how capitalism works.
Well, they're going to charge $20k/year at first, during the land rush phase. Wait for some competitors to die off. Keep it low a while longer to kill off the incumbents. Then it'll jump up a bunch, before finally being even more expensive than the original thing.
See also: Uber & AirBnB.
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@adavid @spriebsch @preinheimer And we're still in the early phase of @pluralistic's enshittification cycle with AI.
The likes of Anthropic, OpenAI, Google, and Microsoft are still locking users and businesses into their platforms.
Tokens are being given away for free, even to people who don't want them.
The real rentseeking fun begins once everyone's locked into a platform.
For example, Imagine a world where most businesses run software created using Claude Code completely unchecked.
What's to stop Anthropic from pushing out a future update of Claude Code that routinely generates code that relies on Anthropic's proprietary APIs to work?
What's to stop Microsoft from pushing out a future update of Copilot that only works with customer data stored in Dynamics?
What's to stop Google from pushing out an update to Gemini where all the generated code is exclusively hosted in Google Cloud?
Why, suddenly you're not just paying for an AI tool that costs the equivalent of a developer's salary.
But also, if you ever stop paying the monthly rent, then your access to the proprietary APIs ends and all your software breaks. Or you lose access to your customer records. Or all the code you've ever generated, stored on the affiliated cloud platform, vanishes.
And beyond coding, there's many other ways these platforms could be enshittified for profit.
For example, if millions of people trust LLMs to manage their daily lives, then suddenly making sure AI agents answer a question like "What should I have for lunch today" with "a Big Mac" is worth billions of dollars to McDonald's.
Worst of all, if the cost of building out all the data centres and infrastructure is in the trillions, it limits the market to just a handful of players.
And any online platforms that use their APIs will have to pay an economic rent of their choosing.
I'm sure there's many other ways they're planning to use this to extract profits and build power.
That's why investors are willing to pour trillions into this thing.
It's not because they believe AGI is just around the corner.
It's because they believe that if enough people and businesses get locked in, they get to put a tax on everything. -
Get ready for surge pricing on your developer hours.
@preinheimer omg, crunch pricing for when something breaks in prod
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If an "AI" company can sell you access to software that will replace a $250k/year software engineer. They're going to charge $249k/year for it.
That's how capitalism works.
Well, they're going to charge $20k/year at first, during the land rush phase. Wait for some competitors to die off. Keep it low a while longer to kill off the incumbents. Then it'll jump up a bunch, before finally being even more expensive than the original thing.
See also: Uber & AirBnB.
We should perhaps agree now to charge double for un-fqqing anything wrecked by AI.
Solidarity.
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If an "AI" company can sell you access to software that will replace a $250k/year software engineer. They're going to charge $249k/year for it.
That's how capitalism works.
Well, they're going to charge $20k/year at first, during the land rush phase. Wait for some competitors to die off. Keep it low a while longer to kill off the incumbents. Then it'll jump up a bunch, before finally being even more expensive than the original thing.
See also: Uber & AirBnB.
@preinheimer until the free / paid tokens are wasted for some trophies AND the code is an unbearable and non funtional mess.
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If an "AI" company can sell you access to software that will replace a $250k/year software engineer. They're going to charge $249k/year for it.
That's how capitalism works.
Well, they're going to charge $20k/year at first, during the land rush phase. Wait for some competitors to die off. Keep it low a while longer to kill off the incumbents. Then it'll jump up a bunch, before finally being even more expensive than the original thing.
See also: Uber & AirBnB.
@preinheimer Eventually, they will be charging about 500k per year, you know, when the cost of training engineers goes up due to the loss of learning culture and substrate.
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@adavid @spriebsch @preinheimer And we're still in the early phase of @pluralistic's enshittification cycle with AI.
The likes of Anthropic, OpenAI, Google, and Microsoft are still locking users and businesses into their platforms.
Tokens are being given away for free, even to people who don't want them.
The real rentseeking fun begins once everyone's locked into a platform.
For example, Imagine a world where most businesses run software created using Claude Code completely unchecked.
What's to stop Anthropic from pushing out a future update of Claude Code that routinely generates code that relies on Anthropic's proprietary APIs to work?
What's to stop Microsoft from pushing out a future update of Copilot that only works with customer data stored in Dynamics?
What's to stop Google from pushing out an update to Gemini where all the generated code is exclusively hosted in Google Cloud?
Why, suddenly you're not just paying for an AI tool that costs the equivalent of a developer's salary.
But also, if you ever stop paying the monthly rent, then your access to the proprietary APIs ends and all your software breaks. Or you lose access to your customer records. Or all the code you've ever generated, stored on the affiliated cloud platform, vanishes.
And beyond coding, there's many other ways these platforms could be enshittified for profit.
For example, if millions of people trust LLMs to manage their daily lives, then suddenly making sure AI agents answer a question like "What should I have for lunch today" with "a Big Mac" is worth billions of dollars to McDonald's.
Worst of all, if the cost of building out all the data centres and infrastructure is in the trillions, it limits the market to just a handful of players.
And any online platforms that use their APIs will have to pay an economic rent of their choosing.
I'm sure there's many other ways they're planning to use this to extract profits and build power.
That's why investors are willing to pour trillions into this thing.
It's not because they believe AGI is just around the corner.
It's because they believe that if enough people and businesses get locked in, they get to put a tax on everything.@aj @adavid @spriebsch @preinheimer @pluralistic Artificial version of the Great Potato Famine
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If an "AI" company can sell you access to software that will replace a $250k/year software engineer. They're going to charge $249k/year for it.
That's how capitalism works.
Well, they're going to charge $20k/year at first, during the land rush phase. Wait for some competitors to die off. Keep it low a while longer to kill off the incumbents. Then it'll jump up a bunch, before finally being even more expensive than the original thing.
See also: Uber & AirBnB.
@preinheimer They learned it from Walmart
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If an "AI" company can sell you access to software that will replace a $250k/year software engineer. They're going to charge $249k/year for it.
That's how capitalism works.
Well, they're going to charge $20k/year at first, during the land rush phase. Wait for some competitors to die off. Keep it low a while longer to kill off the incumbents. Then it'll jump up a bunch, before finally being even more expensive than the original thing.
See also: Uber & AirBnB.
@preinheimer Enshittification of for-profit enterprises is inevitable.
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If an "AI" company can sell you access to software that will replace a $250k/year software engineer. They're going to charge $249k/year for it.
That's how capitalism works.
Well, they're going to charge $20k/year at first, during the land rush phase. Wait for some competitors to die off. Keep it low a while longer to kill off the incumbents. Then it'll jump up a bunch, before finally being even more expensive than the original thing.
See also: Uber & AirBnB.
@preinheimer I wouldn't expect that same situation to hold unless they're able to shut out the competition that is just way to easy to get going and furthermore the competition that will develop more slowly based on vetted training materials. That'll be hard to accomplish with the open source models out there already to ruin that whole strategy.
The price will definitely go way up, but unlikely to the same levels.
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If an "AI" company can sell you access to software that will replace a $250k/year software engineer. They're going to charge $249k/year for it.
That's how capitalism works.
Well, they're going to charge $20k/year at first, during the land rush phase. Wait for some competitors to die off. Keep it low a while longer to kill off the incumbents. Then it'll jump up a bunch, before finally being even more expensive than the original thing.
See also: Uber & AirBnB.
@preinheimer don't forget that the quality of the "service" will decrease whilst the cost increase.
see also: classic ERP systems
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If an "AI" company can sell you access to software that will replace a $250k/year software engineer. They're going to charge $249k/year for it.
That's how capitalism works.
Well, they're going to charge $20k/year at first, during the land rush phase. Wait for some competitors to die off. Keep it low a while longer to kill off the incumbents. Then it'll jump up a bunch, before finally being even more expensive than the original thing.
See also: Uber & AirBnB.
@preinheimer See also: Netflix et al.
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